Vietnamese consumers lead regional optimism, fueling cross-border spending

According to United Overseas Bank Limited (UOB)'s ASEAN Consumer Sentiment Study (ACSS) 2024, Vietnamese consumers are the most optimistic about their country's economic outlook compared to their regional peers.

Over 70% of Vietnamese respondents expressed confidence in their country's economic performance for the next six to twelve months, driven by its strong economic recovery in the first half of 2024.

Vietnam's GDP surged by 6.42% in the first half of 2024, a significant rise from the 3.72% recorded in the first half of 2023, according to the General Statistics Office of Vietnam.

UOB's latest economic forecast, revised last month, projects Vietnam's full-year GDP growth to reach 6.4%, up from 5.9%, following a remarkable third-quarter GDP growth of 7.4%.

This optimistic sentiment translates into increased cross-border spending. With borders reopening post-COVID-19, 71% of Vietnamese respondents reported spending overseas within ASEAN over the past year, mainly on business and leisure trips. This rate surpasses the regional average of 66% and exceeds levels seen in Indonesia, Malaysia, and Thailand.

"It is encouraging to see Vietnamese consumers leading the region in optimism around local economic conditions, with the upbeat sentiment likely contributing to the exuberance in cross-border spending," said Paul Kim, Head of Personal Financial System, UOB Vietnam.

"This reflects Vietnam's success in promoting stable economic growth and deepening its regional integration," he added.

The robust growth experienced by Vietnam since early 2024 has led to increased consumer confidence in the country's near-term economic stability. Recession concerns over the next six to twelve months have decreased by 7 percentage points year-on-year.

At 70%, the proportion of Vietnamese respondents confident in the country's economic future is also 18 percentage points above the regional average.

Vietnamese consumers are also the most optimistic about their personal finances, with 90% expecting to be financially stable or better off by June 2025. This is followed by Indonesia (89%) and Thailand (82%).

Despite easing recession fears from last year, 77% of Vietnamese consumers remain worried about financial-related matters. Rising inflation remains the top financial worry, cited by 60% of respondents, followed by increased household expenses (53%).

Regarding overseas spending, over 70% of Vietnamese consumers reported expenditures abroad within ASEAN over the past year, with Thailand and Singapore as the most popular destinations.

The ACSS, now in its fifth year, is UOB's flagship regional study on consumer trends and sentiments across Singapore, Malaysia, Thailand, Indonesia, and Vietnam. Conducted from May to June 2024, the study surveyed 5,000 respondents across the five countries, including 1,000 from Vietnam.